Supreme Court Sides With Fed Governor Lisa Cook, For Now

U.S. President Donald Trump recently took the case to the Supreme Court after a district judge found no just cause for him to fire the governor.

Fed’s Lisa Cook Survives Legal Challenge as Supreme Court Rebuffs Trump

Federal Reserve Governor Lisa Cook notched another small win on Wednesday after the Supreme Court allowed her to remain in her role until it weighs oral arguments from both sides in January. The development comes just weeks after the Trump administration asked the Supreme Court to let the president fire Cook over allegations of mortgage fraud.

(The Supreme Court has allowed Federal Reserve Governor Lisa Cook to remain in her role pending upcoming oral arguments in January / U.S. Supreme Court) Last month, the U.S. District Court for the District of Columbia approved Cook’s request for a temporary restraining order against Donald Trump after the president issued a letter of dismissal to the governor at the end of August. But Trump only upped the ante and turned to the highest court in the land, seeking a reversal of the approved order.

Much to the president’s chagrin, the Supreme Court has now decided to keep the restraining order in place, allowing Cook to remain on the Federal Open Market Committee (FOMC), a select group of central bank officials who decide the direction of the country’s interest rates. The governor will participate in the next couple of FOMC meetings in October and December.

“President Trump lawfully removed Lisa Cook for cause from the Federal Reserve Board of Governors,” said White House spokesman Kush Desai. “We look forward to ultimate victory after presenting our oral arguments before the Supreme Court in January.”

Trump has mostly directed his attention to Fed Chair Jerome Powell, calling him “stupid” and a “numbskull” for not lowering rates all year. “I really believe that Jerome ‘Too Late’ Powell is an OBSTRUCTIONIST!” the president wrote on Wednesday. Both Powell and Cook finally voted for a 25 basis-point cut at the end of September.

Trump only recently turned his attention to Cook after another governor, Adriana Kugler, mysteriously quit in early August. Trump then handpicked one of his loyalists, Stephen Miran, to replace Kugler.

The president now has three appointees on the seven-member Federal Reserve Board of Governors. Axing Cook and replacing her with another partisan would mean a majority of Trump appointees on the board. The latter scenario has raised the stakes on the pending Supreme Court decision. If the court ultimately allows the president to fire Cook, it will set a precedent that many fear will shatter the concept of central bank independence.